Anyone successfully trading ASX intraday ranges with CFDs?

[telstrareg]

I’ve been having a go recently with $10/side order just to try and get a feel. It seems that by the time I’m confident there is a certain trend in play, I place an order and the trend runs out of steam. I’m lucky to cover my commission and often have to forfeit part of it. It’s rare to find XAO following a single trend for the whole day, so often your trying to deal with 2 or 3 turns. My comm is 10 basis points, so I need 0.2% to start making a profit. Since I’m probably going to be wrong about half the time, to make it worthwhile I need to be on trend that goes for at least 0.65%.

Can anyone suggest any good stocks for this style of trading? Admittedly the ranges have been narrowing these last few days as the market has been making lower highs.

 

[R0n1n]

You are right. I just have to keep scavenging for stocks that are able to perform better. The list is narrowing down, specially those stocks that move up or down a fair bit during the day.

 

[yogi-in-oz]

I’ve been having a go recently with $10/side order just to try and get a feel. It seems that by the time I’m confident there is a certain trend in play, I place an order and the trend runs out of steam. I’m lucky to cover my commission and often have to forfeit part of it. It’s rare to find XAO following a single trend for the whole day, so often your trying to deal with 2 or 3 turns. My comm is 10 basis points, so I need 0.2% to start making a profit. Since I’m probably going to be wrong about half the time, to make it worthwhile I need to be on trend that goes for at least 0.65%.

Can anyone suggest any good stocks for this style of trading? Admittedly the ranges have been narrowing these last few days as the market has been making lower highs.

Hi ya telstrareg,

Maybe, instead of getting stressed out about scalping a few points EVERY day,
a different approach to the market, may serve you better ... yes ???

You may be able to identify days, that are likely to have a sustained trend
for most of the day. Often, those days will give you a better overall return,
even though you are physically trading, on a lot less days = less stress, too !~!

happy days

paul

 

[professor_frink]

I’ve been having a go recently with $10/side order just to try and get a feel. It seems that by the time I’m confident there is a certain trend in play, I place an order and the trend runs out of steam. I’m lucky to cover my commission and often have to forfeit part of it. It’s rare to find XAO following a single trend for the whole day, so often your trying to deal with 2 or 3 turns. My comm is 10 basis points, so I need 0.2% to start making a profit. Since I’m probably going to be wrong about half the time, to make it worthwhile I need to be on trend that goes for at least 0.65%.

Can anyone suggest any good stocks for this style of trading? Admittedly the ranges have been narrowing these last few days as the market has been making lower highs.

some of the miners have some pretty decent looking ranges(note- this is looking at an EOD chart, not sure of how they look intraday)

PDN,JBM,AWC,ZFX(I'm sure there are more, but you'll have to look for yourself)

Considering what you are donating in comms, I would be looking at slightly longer hold times, it will make the brokerage less of an issue.

 

[Uncle Festivus]

My comm is 10 basis points, so I need 0.2% to start making a profit.

Hi TR,
It sounds like you are starting from behind in the first place with that spread. I'd look at a CFD provider who can give you a spread of 3 points on the XJO or CFD equivalent.
Limit the initial trade to half or quarter of the total trade size until the direction is confirmed then pyramid in.
Set your stop at order placement time (I set mine at 5 points away)
Be happy with lot's of small gains, instead of hoping for a retirement size single winner.
I use 10 minute candle stick charts for entry exit (look for those consecutive long wicks & tails(?) which fail to continue the trend for turning points)
Keep it simple - don't stress

Good luck!

 

[telstrareg]

Hi TR,
It sounds like you are starting from behind in the first place with that spread. I'd look at a CFD provider who can give you a spread of 3 points on the XJO or CFD equivalent.
Limit the initial trade to half or quarter of the total trade size until the direction is confirmed then pyramid in.
Set your stop at order placement time (I set mine at 5 points away)
Be happy with lot's of small gains, instead of hoping for a retirement size single winner.
I use 10 minute candle stick charts for entry exit (look for those consecutive long wicks & tails(?) which fail to continue the trend for turning points)
Keep it simple - don't stress

Good luck!

Thankyou Mr. Costanza, all sound advice. 3 points sounds terrific, does IG offer that on a CFD? No doubt you wouldnt get 3 points from a DMA provider, so were talking MM I assume.

 

[Uncle Festivus]

Thankyou Mr. Costanza, all sound advice. 3 points sounds terrific, does IG offer that on a CFD? No doubt you wouldnt get 3 points from a DMA provider, so were talking MM I assume.

Yes, MM XJO200 index spread with IG

 

[skyQuake]

"My comm is 10 basis points"

Thats a crazy spread. If you have a 7pt stop, you need to make a 27pt gain just to pay for 1 bad trade. Stop trading asap and move to IG, they have a 2pt spread , and even their Limited Risk accts have 5pt spreads.

 

[Trembling Hand]

"My comm is 10 basis points"

Yes it would be close to impossible to make money from this intraday. CMC have xjo instruments that you can trade with 2 point spreads (Aussie200). Even this is hard because you are always buying at the ask and selling at the bid so your winners are handicapped 2 points and your losers are 2 points greater. This has a big effect on your expectancy. I have a blog with a link that you can see how this works

http://tremblinghandtrader.typepad.com/

If you trade the SPI200 futures you can play the spread to your advantage. The good thing about CMC's Aussie200 is 1 contract is worth $1 per point. It is the perfect training to see how you go without blowing up a big account.

Good luck

 

[Joules MM1]

a first post, some thoughts

understand the use of intra market pressure and psychology set-ups by the smart money on the xjo

understand the intermediate (generic term, I know) effect of overnight and intra day effects from the NIK and the SSE

understand reporting period and the advantages of being short/long post-cash

I use a cfd platform with a 2 point spread in cash and 4 point spread in post-cash hours

the provider i use also has the added advantage of laggin in price movment when the US and DAX/FTSE decide to swing ...........so, a pos in those indexes calls for consideration of (next days) action on the xjo or at least a momentive effect if only for a short period of time.........time is the key.........all prices revert to the true trend...........the US can be down and the smart money sees that those markets are simply using sucker techniques to draw price psychology and while the cfd might duck in those swing s it will rervert back to local trend when the oz markets rep-opens...........this is like know your product time

if anyone thinks that a 2 point spread is a handicap then they should re-consider trading, period.

one of the beauties about the cfd for the xjo is that there is no cost other than the two major challenges; interest cost on short-sells and dividend pay-outs......in which case all short-sells should be closed at the close of the cash market especially during the dividend period..........alternatively, when the swing calls for a long pos into the following session, then, keep the long open into the cfd close (4.30pm-5.10pm), especially when you see the euro markets are ina bullish phase as the platform price will likely re-open with a move into the euro direction (remember that the ftse opens at (currently) 5.00pm) .........this also calls for a following of the smart(er) money action and to summise what the cfd providers desk is doing........two rivals.........anyone who doesnt understand this should load down a camtasia and record the action over several weeks/months to get what they are doing and then you can capitalise on that action/technique........

the major disadvantage, for me, is that the platform does not provide a volume feed........I have to read intent from both the desk (platform provider) and a couple of generic feeds.........mostly understanding the trend and periods of congestion..........there are defiantely signs from the desk when a break-out is building although this is hard to describe on paper........and when the momentum is strong (especially in other indexes) the desk will take the opportunity to overshoot the cash price thus dissolving the usual support/resistance technical levels (like pivots) hower, this is an advantage when you stick with the larger degree trend and smart money intent.........

you must always be aware of two things; 1 that the cfd provider has access to stop-view, where, stops are mostly placed by weak money and 2 that the cfd provider also trades its own book..........in other words, the implications of this is a wide ranging discussion...........or, you can simply know this and use that knowledge to your advantge, which, maybe to enter or exit or simply stand aside.........

............as this is the first time at this site and the first time I have attempted to, basically, type my method, then..........

part 2 later

Julian

 

[Joules MM1]

in the next post, I want to discuss the times when cfd desks move away from the underlying cash price and the dissadvantages of viewing cfds in isolation, or, only viewing the cfd like a static instrument..........any pre-thoughts or questions from others, I look forward to.........

 

[Trembling Hand]

I think there is a total lack of recognition by CFD traders who is on the other side of their trades. Its not the market but the CFD provider in the Market Maker (MM) case. Why are they on the other side? Because over time 90% of traders lose money. People have filled hundreds of books why, but one tactic that the MMers use is having you buy at the offer and sell at the bid if you are trading intraday looking at 10 to 20 point ranges this is going to greatly effect your long term expectancy. for example on a 10 point move you are handicapped 2 points, that’s 20% of the move buy my maths and if it goes against you 10 points + you have to sell at the bid thats an extra 2 points, again thats 20% greater move.
Day trading many times a day getting your winners cut 2 points and adding 2 points to your losers, this is a big cost you must recognize this as not brokerage free. That’s why The MM is so happy to be on the other side of you buying/selling the spread.
Don't get me wrong you can make money daytrading but it is hard.

 

[Joules MM1]

xjo cfd 2

2




........... download camtasia and study each day (you can set your camera to record each session) and get to know your opponent, especially when you "believe" that an operator has dominance over price direction, then, you get to understand levels and times of engagment.........this is an idea for those who do not have any kind of backtesting facility and also offers a different presentation for viewing, a different forum if you like...........

you see, first you need to develop a professional approach and professional doesnt mean wearing a tie, however, that does imply study..........

there are basically two studies; 1 of the opponent and 2 yourself .........strengths and weaknesses at which levels and which times.........amazes me how often these two studies arent taken-up..........



last post; "cfd desks move away from the underlying cash price" and I think this is a good point to watch for .........the cfd desk also has such other weights as oversees price settings, receipts etc and the desk operators will look to oversees futures settings (you'll need to find out where they get those numbers from) ...........when the price moves away from the underlying cash price and then tends to park at that distance upon each move, for example, when the xjo cfd is 12 points away from the cash in a quiet or congested period, you should ask; what influence is being asserted here........afterall, the difference is no real benefit to the desk.........but, the difference is a clear message to you.........when the cfd is X points away from the cash price and tracks with that difference, regardless of direction then you should observe the bias...........so a +12 points (X amount) in a downmove would imply that the move down is merely a test, a retracement, a finding of price support or demand in a larger degree uptrend.........the difference in this instance is clearly a bullish signal, or at least, a bias not to be ignored............this is my opinion

next ;

"disadvantages of viewing cfds in isolation, or, only viewing the cfd like a static instrument"

whenever I read "I want to establish an overnight position on the xjo " I often wonder what exactly that means..........afterall, all positions are relative to several things; the size of move you are expecting, the size of pos of your (percentage of your) account, the size of overseas effect and affect on the fute, the time of day the pos is taken amongst many.........the xjo fute is not a static price like the cash so a set-and-forget approach is not ideal..........I also think this is part of the challenge for many traders who think of the instrument like they have trader other instruments.........the xjo fute is a beast of its own and you need to be inclusive of the external drivers and by that I mean the other larger players that come to the table at different times in a 24 hour period..........the effect of UK deposits, effect of capital movements from/to precious metals............is the price of gold and silver climbing/falling rapidly that might effect miners enough for the post-cash period? the effect of the reporting period? Holiday period (long weekend, xmas) .............

one thing I like to watch for is when the cfd suddenly climbs into the close.........I am asking; is the climb from the influence of dividend payments or from pressure to set price into the next session (knowing that the US and/or uk/dax is bullish) or are larger players simply tapping the stops to off-load before a larger next-day decline ..........you see, study............you must study other players habits.........their tactical frame-work.........this takes time...........this is a professional business...........

apply an aggressive "need-to-know" attitude...........within that you are applying an aggressive defense...........

a lot of times, the whole ball-game is understanding the business of the other players.........other markets...........other influences...........what the desk may do..........when those might happen...........post-cash influences.........cash-hours influences..........large take-overs..........fx movements, precious metals etc...........

this might sound a little strange .......but..........use your imagination..........this is not trading a stock..........even then, the questions about who is in play is just as relevant, although, rarely asked...........the xjo cfd fute is a dynamic beast and you are well rewarded for the long study you put into its different forces...........​

 

[Joules MM1]

if anyone thinks that a 2 point spread...........

if anyone thinks that a 2 point spread is a handicap then they should re-consider trading, period.

please allow me to exapnd on that........I was not being dissingenuous

that was a serious post...........in fact, if I was mentoring someone and they said that a 2p spread was no good then I'd tell them to close the screen and come back in a year of study.........seriously..........

1 a 2p spread is nothing in context of price study also most traders never consider fee costs for sites like comsec yet are willing to pay fees and wait extended periods of time to get a percentage gain (on a daily basis) so, you see, the cost is a relative to the exercise...........It's like Mark Webber saying he won't race because he couldnt ever start at first position on the starting grid..........I think the focus is in the wrong place..........

2 a lot of cfd traders confuse the context of time versus price..........there is a big difference between a vertical spread play and a pattern play .........the difference between a drag-and-drop 3 second trade on say the RUT or NDX versus the pattern of 1 min cfd platform........the context of (skimming or clipping) scalping is not the same and the costs are not the same.........your spread is your cost..........

3 most cfd platforms do not provide a volume feed or pending feed (if they did then the price purges would widen and be even harder to play unless you have big capital or a network of players to "gang")

4 actually, in many respects, most trader are blind with a cfd platform.........first, the charts are not the cash so they are only representative..........thus, all indicia is like fruit of a poisened tree.........most indicia are pretty futile anyway.........

5 most nearterm cfd trader misunderstand the power of leverage

6 most nearterm cfd traders misunderstand that they need to follow the cash closer than the cfd

7 most nearterm cfd traders misunderstand support and resistances need to come from the cash analysis and how they can use that knowledge to tap into when stops are being hunted in the cfd..........in this instance more stops are triggered in the cfd becasue the traders ARE observing the cash levels but underestimating the use of either the desk provider or other large rplayer who can push the xjo fute (the same way the ftse fute or the spx fute is pushed upon news releases)

8 that the xjo cfd fute is not ACTUALLY a futures contract it is a derivative thus prone to its own extents adn its own (post-cash) supports.........Ive traded the xjo cfd off fibs in the past that you couldnt see in the cash.........the emotional retail extreme works in both the cash and the cfd but at different levels...........

9 like most other instruments, cfd traders do not understand "intent" and neither did I for a very long time.........cfd are a derivative which are used diferently (if only slightly) within large cap intent..........

I am sure I'll think of more later on this

 

[Joules MM1]

if anyone thinks that a 2 point spread...........

part 2

..........these posts are motivated from a pm I rec'd today
...........another time when the spread is also irrelevant is when the index is in a strong trend (youve proven this with your t/a) and the us or the euro markets take a fast (testing) decline or incline.......the direction is largely irrelevant........what's relevent is the players intent in getting price to swing so they can mine..........remember that price movement is purely about liquidity, nothing else............we are talking about mining price weakness in stop placements and basic trader psychology...........this stuff is a lot easier to show in-trade than in type, so, please, ask me more questions...........

some of my best trades are made when I'm in US or euro hours because my sentient logic tells me that the cfd is moving with those external influences ..........so my question then becomes (after considering the position of the local market pressures to be long, short or closed); is this the position that the local larger trader were waiting to be short, long or closed in the cfd and did the action into the cash sloce of the xjo show me those positions and thus is this merely a (mechanism) opportunity to ADD or close to a position.........you see, the question isnt strictly about the trend because a trend is made by people, so, the question is about what those poeple are likely to do given the parameters or time and price within our market and the oversees markets...........

I would go so far as to say that 50% of my short term trades are made during trades on other markets because I have unwritten influences to read that you can't get from an indicator...........I have to ask about THEM, what do they gain..........someone ALWAYS gains from price movement, so, I am asking WHO is then going to gain and should I be following in their foot-steps............

 

[Trembling Hand]

Joules MM1...........Wow my head is spinning.

I think I can assume that a 2 point spread buying/selling '@ market' in you mind/trading is not an impediment to long term intraday profitability. Are you taking reasonable size moves consistently as ever calculation I do with my trading results the diff size spread really messes up my profitability

 

[Joules MM1]

Joules MM1...........Wow my head is spinning.

I think I can assume that a 2 point spread buying/selling '@ market' in you mind/trading is not an impediment to long term intraday profitability. Are you taking reasonable size moves consistently as ever calculation I do with my trading results the diff size spread really messes up my profitability

ok, maybe, If I was to make chronological and logical annotation of my points and question that might open a few doors for you a lot faster........expediency is a major key, I appreciate that........but again, the question is WHOs expediency andhow quickly are they attempting to mine the price (weakness or strength)

look, maybe a simple step-back, a place or two, in the understanding of trend, support, resistances, volume and time function would make all the difference to you.........this stuff takes time to understand and place into context in real time........don't rush, give yourself time and permission.........everyone starts at zero, ok?

the name of the game in my opinion, if someone was to ask me to describe trading, then, I say, trading is "the mining of weakness of one oponent by another"

in the jungle size is everything, that's true to an extent.........but so is the time that that size is put into place, into activity..........so you can play in a big pond with bigger fish if you know when they'll be there and who they want to feed on..........this is a thinking game

 

[Trembling Hand]

You are a funny person.
Expediency!!
Don't you mean expectancy?? Or do you not know what I am talking about?
Please do not assume that the people on this forum are idiots or all novices. You may end up on the wrong side of your own zero-sum game!!

 

[Joules MM1]

You are a funny person.
Expediency!!
Don't you mean expectancy?? Or do you not know what I am talking about?
Please do not assume that the people on this forum are idiots or all novices. You may end up on the wrong side of your own zero-sum game!!

the post wasnt designed to push any buttons.........it is designed to get you to think before the trade, not in the trade..........the post is designed to probe your areas of weakenss before you re-enter the next trade..........this is clearly the case and its a good thing..........the post is an offering of a different perspective, that is all..........a gift of my time..........I think you are a smart enough person to ask these questions, therefor, eventually, a smart enough disposition to make good on your intelligence, which you have plenty of..........your intelligence is not at issue here...........neither is mine and neither is your attitude or mine..........what we are attempting to do here, is to flush out the real basis of market price movement.........this may push into areas about yourself that you do not like..........that's just a part of the ball game...........that's all..........

be well

 

[Trembling Hand]

what we are attempting to do here, is to flush out the real basis of market price movement.........this may push into areas about yourself that you do not like..........that's just a part of the ball game...........that's all..........

No I don't think that is what I just asked you
"I think I can assume that a 2 point spread buying/selling '@ market' in you mind/trading is not an impediment to long term intraday profitability. Are you taking reasonable size moves consistently?"

As I said with my results it really makes a bit diff to me making money or not. And I was wondering if it dose not effect you?